Government going ‘cashless’ this year

BEGINNING this year, government agencies will use cards, not cash, in purchasing goods and services, a scheme that President Benigno Aquino 3rd said will curb the practice of conversion and spare state personnel from “temptation.”

“Our goal is to institutionalize reforms that make it very difficult for unscrupulous individuals to steal from the people—regardless of who sits in office. This is where the introduction of cashless transactions comes in,” the President said at the start of the good governance summit in Pasay City.

By going “cashless,” Aquino explained that government agencies and their accountable officials will no longer have to stash large amounts of cash in the office which “can pose a temptation to even the most honest employee.”

He cited a recent study that identified high volume of cash advances in agencies as among the major financial risks the government is facing.

Aquino said that 54 percent of government transactions are already being done through a cashless system.

“We are far from being a cashless society: 98 percent of all retail financial transactions in our country are still made in cash. The government seems to be ahead of the market, with 54 percent of its financial transactions already done through a cashless system. And, for the sake of accountability and efficiency, we are pushing the envelope further,” he added.

Aquino said the Cashless Purchase Cards (CPC), which resemble ordinary credit cards, will have restrictions that suit government requirements. The CPCs will be used for “low-value payments.”

By the end of the year, government will no longer issue checks and pay its obligations through these CPCs, he said.

“Through the Cashless Purchase Cards and other similar reforms, government financial transactions should be 100-percent checkless and 80-percent cashless before the end of this year,” Aquino said.

The CPC program will be implemented in the first three months of the year at the Department of Budget and Management and the Department of National Defense.

Aquino said a limited number of cards will be distributed to these agencies. Purchases will be limited to medical supplies, meals, transportation of official documents, airline tickets, and construction supplies for minor repairs.

“If all goes well, the program will be rolled out and cashless purchases cards will be distributed in other national government agencies next year,” he said.

The President said wrongful use of the cards can be easily tracked and checked. He noted that government officials in provinces will benefit from this system since they will no longer go through the lengthy process of waiting for funds for minor repairs in their offices.

“The cashless purchase cards will allow them to procure the necessary materials immediately—and, given that accounting for transactions is automatically done, suspicious use of the card can be tracked easily. On top of that, this system also allows us to capture and collate the correct data, which redounds to real benefits. For one, a bigger sample size of data will allow us to refine our understanding of programs that need funding. It will also make it easier for the Treasury to determine how much cash is needed on a daily basis—giving us an accurate record, which government can use in future decision making,” he said.

Palace spokesman Edwin Lacierda said accountability will not be a problem because the materials procured will readily be known and the disbursing officer immediately identified.

He stressed that the new system would do away with the practice of “conversion” wherein officials would use funds intended for one purpose for another. This practice was prevalent in the military, where a number of generals were involved in procurement scams.